Water Infrastructure NC Division of Water Infrastructure Kim H. Colson, P.E., Director Division of Water Infrastructure
Outline Consolidation of funding programs Funding programs Clean Water and Drinking Water SRFs CDBG-I State grants State Water Infrastructure Authority Activities Annual Report
Session Law 2013-360 (Budget) Created Division of Water Infrastructure Consolidated Water Infrastructure Funding SRFs (Drinking Water and Clean Water) CDBG-Infrastructure State Programs Created State Water Infrastructure Authority (Authority)
N.C. Water and Wastewater Infrastructure Funding Prior to 2013 Budget Bill Golden LEAF Rural Economic Development Center Clean Water Management Trust Fund Dept. of Environment and Natural Resources Dept. of Commerce Capacity/ Planning Grant Supplemental Grants Economic Infrastructure Grants Wastewater Infrastructure Grants Infrastructure Finance Section Clean Water State Revolving Fund Loans General Revolving Loans Technical Assistance Grants Emergency Loans High Unit Cost Grants Public Water Supply Drinking Water State Revolving Fund Loans General Revolving Loans Technical Assistance Grants Emergency Loans High Unit Cost Grants Commerce Finance Center CDBG Economic Development Funds Industrial Development Fund Division of Community Assistance CDBG Infrastructure Funds
N.C. Water and Wastewater Infrastructure Funding Current Framework Golden LEAF Rural Economic Development Center Clean Water Management Trust Fund Dept. of Environment and Natural Resources Dept. of Commerce Division of Water Infrastructure Water and Wastewater Infrastructure Funding Commerce Finance Center CDBG Economic Development Funds Industrial Development Fund FEDERAL FUNDS Clean Water State Revolving Fund (SRF) Loans Drinking Water State Revolving Fund (SRF) Loans Community Development Block Grant-Infrastructure (CDBG-I) Grants STATE FUNDS General Revolving Loans Emergency Loans Technical Assistance Grants High Unit Cost Grants
Funding Programs Clean Water State Revolving Fund Drinking Water State Revolving Fund Community Development Block Grant State Reserves Drinking water / wastewater Grants / loans
Funding Programs Priority systems (general) Rehabilitation projects higher priority Economic status System management Doesn t exclude other projects No ready-to-proceed requirements Two years to enter construction contract 159G-41
Funding Programs Outreach Training for funding applications Usually one event with multiple programs I m-funded;-now-what? training A walk through the 2-year funding process One-on-one meetings
Funding Programs Clean Water State Revolving Fund Drinking Water State Revolving Fund Community Development Block Grant State Reserves Drinking water / wastewater Grants / loans
Clean Water State Revolving Fund Federal / state low-interest loan program Replaced the federal construction grants program Capitalized since 1989 20% state match NC allocation is +/- 1.8% $100+ million / year Most is revolving funds CW Needs Survey - $6 billion for NC
Clean Water State Revolving Fund To accomplish the objectives, goals, and policies of the Clean Water Act Eligible activities include: Collection and treatment of wastewater Stormwater Stream restoration Reclaimed water Priority criteria Rehabilitation / upgrades Impaired streams, basin plans
Clean Water State Revolving Fund Eligible applicants Local government unit city, county, w&s district, sanitary district, etc. Nonprofit water corporation Benefits ½ market rate or 0% loans (159G-40) No interest during construction Principal forgiveness
Millions CWSRF Capitalization and Match $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 Federal Share Commitments $123 million in state match resulted in $1.5 billion in commitments over the life of CWSRF in NC $200 $0 State Match
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 CWSRF Pace 120% 110% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Assistance as a % of Available (Pace) Program Changes Made US Avg. 95% Assistance as a % of Available
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Millions CWSRF Commitments $250 $200 $150 $100 ARRA SRF $50 $- Fiscal Year
CWSRF Amendments Davis Bacon; American Iron and Steel Current year-to-year requirement Made permanent Brooks Act Fiscal sustainability plans Project basis EPA required to study allocations
Funding Programs Clean Water State Revolving Fund Drinking Water State Revolving Fund Community Development Block Grant State Reserves Drinking water / wastewater Grants / loans
Drinking Water State Revolving Fund Federal / state low-interest loan program Mirrors CWSRF Capitalized since 1997 20% state match NC allocation is +/- 2.4% DW Needs Survey - $10 billion for NC $50 million / year
Drinking Water State Revolving Fund To further the health protection objectives of the Safe Drinking Water Act (SDWA) Specific requirements for priority in the SDWA most serious risk to human health; ensure compliance with the requirements of SDWA; and assist systems most in need on a per household basis
Drinking Water State Revolving Fund Priority criteria Public health benefits Rehabilitation / upgrades Eligible applicants Same as CWSRF plus public utilities Benefits Same as CWSRF Synchronize with CWSRF program
Funding Programs Clean Water State Revolving Fund Drinking Water State Revolving Fund Community Development Block Grant State Reserves Drinking water / wastewater Grants / loans
CDBG - Infrastructure Federal grant program Non-entitlement communities Excludes 23 larger cities / towns Excludes 3 urban counties Units of General Local Governments Cities, towns and counties Does not include sanitary districts, authorities, etc.
CDBG - Infrastructure Low moderate income areas 51% or greater Service area may be entire town or part of town Priorities More focus on economic need
CDBG - Infrastructure Water and Sewer Infrastructure Increased to approx. $26 million Administration transferred to DENR 7 positions transferred Maximum funding - $3 million Aligned with state grants (159G-36)
CDBG - Infrastructure Program changes Increase training / outreach Engineering reports submitted after funding awarded Environmental documents by grantees Additional methods to determine LMI One public hearing prior to application
Funding Programs Clean Water State Revolving Fund Drinking Water State Revolving Fund Community Development Block Grant State Reserves Drinking water / wastewater Grants / loans
State Reserves Loans Wastewater Revolving loans (similar to SRF) Emergency loans Drinking water Inactive funds used for DWSRF match Loan limits $3 million over 3 years (159G-36) Applies to both DW or WW
State Reserves Grants High unit cost grants >1.5% rates/mhi (159G-33, 159G-34) $3 million maximum over 3 years (159G-36) Technical assistance grants resolve noncompliance (159G-33, 159G-34) $50,000 maximum over 3 years (159G-36)
State Reserves SL 2013-360 SFY 2014-15 - $5 million (recurring) critical needs grants Authority determine the distribution of funds between water and wastewater projects Tier 1 and 2 counties
State Water Infrastructure Authority 9 member authority 2 appointed by Governor 2 appointed by Senate 2 appointed by House 3 ex officio Qualifications provided in 159G-70
Authority s Powers and Duties Defined at NCGS 159G-71 12 duties in 4 broad categories 1. Distribute loan and grant funding 2. Define water infrastructure needs and funding sources 3. Assess best and emerging practices in utility planning 4. Assess need for troubled systems protocol
Authority s Annual Report November each year 2014 first report Purpose Overview of Authority s activities to date Summarize concerns and issues regarding NC s water infrastructure & available funding Provide recommendations to address some of those issues
Overview of Authority s Activities Required to have 4 meetings / year In 2014, 10 meetings were held Approved funding for 95 projects for $226 M $91.5 M in CWSRF loans $105 M in DWSRF loans $26 M in CDBG-I grants $3.5 M in state grants
Overview of Authority s Activities Presentations and discussions Troubled systems Recent infrastructure master plans Asset management Public-private partnerships
Concerns and Issues Identified Significant demand for funding State grant funds may not be available to some of the targeted communities Proactive system management and financing should be encouraged The Division s and the Authority s application review priorities should be consistent
Millions Significant Funding Demand Exists Issue Requests for funding will likely continue to outpace the availability of both loan and grant funds across all programs (328 requests for $719 M) $300 $250 $200 $150 $100 $50 Requested Funded $0 CWSRF Loans DWSRF Loans CDBG-I State Grants
State Grant Funding to Targeted Communities Current legislation Requires state reserve grant funds targeted to rural, economically distressed communities Defined as only in Tier 1 and 2 counties, and SL 2013-360 Based on % MHI spent on water/sewer 159G-33, 159G-34
State Grant Funding to Targeted Communities Issue County tier and amount spent on water/sewer may not accurately represent the economic conditions in rural communities Recommendation Base applicant eligibility on affordability using factors such as poverty rates, unemployment, population, water/sewer rates and/or others
Town of Benson Town of Kenly Town of Robbins Town of Lincolnton Poverty Rate (%) Communities Within Tier 3 Counties 50.0% 45.0% 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% State of NC Johnston County Moore County Lincoln County
Broaden Use of State Grant Funds Issue Grants are not available for any proactive activities such as ways to assist utilities to become more self-sufficient and avoid future/continued reliance on grant funds Recommendation Broaden the use of grant funds to provide incentives to encourage utilities to become more proactive in the management and financing of their systems
Broaden Use of State Grant Funds Currently only Technical Assistance Grants are available Studies/analyses to determine how to correct violations Look at proactive grants Asset inventory and assessment Consolidation studies
Align Priority Statutes 159G-71 assigns priority determination to the Authority 159G-23 requires the use of the common criteria by the Division Change 159G-23 to considerations Allows Division to operate in concert with Authority
Contact Information Division of Water Infrastructure Homepage: go.ncdenr.gov/wi Phone: 919-707-9160 Kim H. Colson, P.E. 919-707-9177 kim.colson@ncdenr.gov